US public debt tops $34 trillion as Congress heads into funding fight

The U.S. federal government's total public debt has reached $34 trillion for the first time, the U.S. Treasury Department reported on Tuesday, as members of Congress gear up for another series of federal funding battles in the coming weeks. The Daily Treasury Statement for Friday showed that the total public debt outstanding rose to $34.001 trillion from $33.911 on Thursday.

The debt that counts toward the federal debt ceiling rose to $33.89 trillion on Friday from $33.794 trillion on Thursday. This "debt subject to limit" category excludes the unamortized discount on Treasury bills and zero coupon bonds, debt issued by the Federal Financing Bank and guaranteed debt of certain other agencies.

The milestone comes shortly after the federal debt topped $33 trillion in September amid rising federal deficits fueled by falling tax revenues and rising federal expenditures.

Congress returns to Washington next week to tackle the Jan. 19 and Feb. 2 deadlines for settling government spending through September, amid Republican demands to reduce fiscal 2024 discretionary spending below caps agreed in June. Lawmakers also hope to pass emergency aid for Ukraine and Israel, possibly with unrelated U.S. border security provisions attached.

Failure to approve the one-dozen fiscal 2024 spending bills would plunge Washington agencies into shutdown mode. But reaching a compromise could become more difficult with the November presidential and congressional elections coming quickly into focus.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a fiscal watchdog group, called the $34 trillion federal debt figure "a truly depressing achievement," attributing it to political leaders' unwillingness to make difficult fiscal choices.

"We remain hopeful that policymakers will take further measures to reduce our borrowing either by raising taxes, reducing spending, or creating a fiscal commission – or ideally by doing all of the above," MacGuineas said in a statement.

White House spokesperson Michael Kikukawa said the debt increases were "trickle-down debt" driven by Republican-passed tax cuts in 2017 that benefited corporations and wealthy Americans.

"Congressional Republicans want to double down on MAGAnomics with more than $3 trillion in giveaways skewed to the wealthy while forcing hardworking Americans to pay the price by cutting Social Security, Medicare, and Medicaid," Kikukawa said in a statement.

He added that Biden plans to reduce U.S. deficits by $2.5 trillion over 10 years by increasing taxes on large corporations and wealthy Americans and cutting spending on pharmaceuticals and tax breaks for oil companies.